Radio Shack Selling out to Best Buy?

I had heard this rumor a few weeks ago that there were talks about Radio Shack and Best Buy getting in bed with each other. But like with most rumors, they are usually just that. I did however come across a little snippet today stating that there have been talks about Best Buy acquiring the retail giant AKA Radio Shack.

We all know about the friendly neighborhood Shack. Where "you have question and they have answers". Personally I saw this coming many years ago. Radio Shack was a niche type of electronics store. They were one of the first to carry the personal computer. But their major niche market was the hobbyist and tinkerer. If you needed some sort of a do-dad or what-cha-ma-call-it, Radio Shack was the place to find it. I must admit that I used to work for Radio Shack, back in the day when it was owned by the Tandy corporation and Len Roberts was CEO. Now don't get me wrong, the business model wasn't great back then, but there was one thing that they had that they don't anymore: profit!

Radio Shack offered all those little parts and IC chips, and dip switches and what not. The store would buy a part for $.05 and then sell it for $2.99. Talk about profit. Certain Radio Shack stores could sell parts like this all day long. And the average ticket wasn't just a $2.99 part, it was 10 or more of these and other do-dads. Now try to find these parts in a Radio Shack store. They don't exist. They got rid of it so they could focus on cell phones, and TVs, and computers. Yeah because no one else is selling those. The average profit margin on a TV or computer was usually less than 3%. That barley pays for the labor to stock it and sell it. Remember, Radio Shack no longer pays commission to their employees, so they are just like any other clerk in the job market. The only difference is they are required to know, retain, and recommend products to customers.

Radio Shack is no longer the place for answers but the place to pay more than anywhere else for the same product. It has also become the place to pickup decent product on clearance because we all know it never sold at their retail price.

I wish Radio Shack the best of luck; I really do. I am sad to see it be sold to Best Buy, but hey lets face it, Radio Shack has basically the same sales practice as Best Buy anyway. I'm sure the change will bring better product and better prices, but I doubt it will ever bring back the source for truthful knowledgeable answers and staff.

RIP Radio Shack

Sources: http://www.foxbusiness.com/story/markets/industries/finance/radioshack-nearing-deal-best-buy-rshbbyjpm/

http://albuquerque.bizjournals.com/albuquerque/stories/2010/04/19/daily10.html